Hyundai Commercial Inc. maintained its dominant market position and saw operating income increase in the first half of 2015 due to cost efficiency and expanded sales volume, though it faces intensive competition. Asset quality remained excellent due to enhanced risk management. The company seeks to diversify its asset portfolio and funding sources to ensure liquidity and capital adequacy.
2. 1
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3. 2
Maintained dominant market position through Changing sales strategy, Product
Differentiation despite of intensive competition in finance market
Due to cost efficiency and expanded sales volume, Operating income increased
Maintained Excellent asset quality by enhancing risk management
Overview
4. 2,623 2,716 3,247 3,359
631 745
834 1,0283,254 3,460
4,081 4,387
80.6% 78.5% 79.6%
76.6%
2012 2013 2014 1H15
Auto asset Non-auto asset % of Auto asset
3
Asset
Asset Portfolio Business Strategies
(Unit: KRW bn)
2012 2013 2014 1H15 YTD
New Auto
Captive
993 748 949 964 1.6%
New Auto
Non-Captive
734 868 1,019 1,135 11.4%
Used Auto 896 1,100 1,279 1,260 -1.5%
Corporate
Finance
631 745 834 1,028 23.3%
Auto-finance
• Focused on B2B financing
• Enlarged line-up of commodity based on service
(lease, rental)
Corporate-finance
• Stable growth on Corporate Finance focusing
captive loans for HMG group
• Diversified asset portfolio (NPL, real estate,
structured finance etc.)(Unit: KRW bn)
5. 4
Profitability
Summary of Income Statement
2013 2014 1H14 1H15 YoY
Operating Rev 346.2 350.8 170.1 183.8 8.1%
Operating Exp 270.4 286.3 137.3 146.0 6.4%
Interest expense 157.8 152.7 76.7 72.1 -6.0%
Lease expense 0.0 0.2 0.1 0.5 595.4%
SG & A 71.5 81.7 38.3 42.4 10.7%
Bad debt expense 28.6 33.9 16.3 22.7 39.5%
Operating Income 75.9 64.5 32.8 37.7 15.1%
Non-operating
Income
-16.1 -22.5 -7.7 -4.3 n.a
Equity method
income
-16.3 -22.4 -7.4 -4.4 n.a
Net Income 36.6 24.7 15.7 24.1 53.0%
New handling ROA 3.0% 2.7% 2.5% 2.5% 0.0%p
Analysis on Income Statement
Operating Revenue
• Maintained growth of fundamental by increasing
sales volume
• Profit margin of high-yield lease product
increased
Operating Expense
• Interest expense decreased due to key rate drop
• SG & A expense increased due to securing
medium and long term growth
• Bad debt expense increased with asset growth
Net Income
• Loss on equity method valuation of HLI decreased
(Unit: KRW bn)
